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Guterres warns of UN's 'imminent financial collapse'
Published by Global Banking & Finance Review®
Posted on January 30, 2026
3 min readLast updated: January 30, 2026
Global Banking & Finance Review®
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Published by Global Banking & Finance Review®
Posted on January 30, 2026
3 min readLast updated: January 30, 2026
UN chief Guterres warns of an imminent financial collapse due to unpaid fees and budget rules, threatening program delivery globally.
By Emma Farge
GENEVA, Jan 30 (Reuters) - The U.N. chief has told member states that the organisation is at risk of "imminent financial collapse", citing unpaid fees and a budget rule that forces the global body to return unspent money, a letter seen by Reuters on Friday showed.
U.N. Secretary-General Antonio Guterres has repeatedly spoken about the organisation's worsening liquidity crisis but this is his starkest warning yet, and it comes as its main contributor the United States is retreating from multilateralism on numerous fronts.
"The crisis is deepening, threatening programme delivery and risking financial collapse. And the situation will deteriorate further in the near future," Guterres wrote in a letter to ambassadors dated January 28.
The U.S. has slashed voluntary funding to U.N. agencies and refused to make mandatory payments to its regular and peacekeeping budgets.
U.S. President Donald Trump has described the U.N. as having "great potential" but said it is not fulfilling that, and he has launched a Board of Peace which some fear could undermine the older international body.
Founded in 1945, the U.N. has 193 member states and works to maintain international peace and security, promote human rights, foster social and economic development, and coordinate humanitarian aid.
In his letter, Guterres said "decisions not to honour assessed contributions that finance a significant share of the approved regular budget have now been formally announced."
He did not say which state or states he was referring to, and a U.N. spokesperson was not immediately available for comment.
'KAFKAESQUE CYCLE'
Under U.N. rules, contributions depend on the size of the economy of each member state. The U.S. accounts for 22% of the core budget followed by China with 20%.
But by the end of 2025 there was a record $1.57 billion in outstanding dues, Guterres said, without naming them.
“Either all Member States honour their obligations to pay in full and on time – or Member States must fundamentally overhaul our financial rules to prevent an imminent financial collapse," he said.
Guterres launched a reform task force last year, known as UN80, which seeks to cut costs and improve efficiency. To that end, states agreed to cut the 2026 budget by around 7% to $3.45 billion.
Still, Guterres warned in the letter that the organisation could run out of cash by July.
One of the problems is a rule now seen as antiquated whereby the global body has to credit back hundreds of millions of dollars in unspent dues to states each year.
"In other words, we are trapped in a Kafkaesque cycle expected to give back cash that does not exist," said Guterres, referring to author Franz Kafka who wrote about oppressive bureaucratic processes.
(Reporting by Emma Farge, Editing by Miranda Murray, Ludwig Burger and Hugh Lawson)
A financial crisis is a situation in which the value of financial institutions or assets drops rapidly, leading to a loss of confidence among investors and potential economic downturn.
Debt instruments are financial assets that represent a loan made by an investor to a borrower. Examples include bonds, mortgages, and promissory notes.
Financial stability refers to a condition where the financial system operates effectively, allowing for the smooth functioning of financial markets and institutions without significant disruptions.
International organizations are entities established by multiple countries to work together on common goals, such as the United Nations or the World Bank, often focusing on economic and social development.
Economic growth is the increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
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